The Impact Discounts and the Price-Quality Effect Have on the Choice of an Institution of Higher Education

ABSTRACT This article reports on the results of a study of the price-quality relationship as it impacts consumer's institution of higher education selection decisions. This study also investigates the effect that financial discounts in the form of financial aid have on the decision to attend an institution. Based upon focus group discussions and depth interviews, a set of quality attributes were developed. A survey of 303 potential college students and their parents indicates that high price and low price institutions are evaluated higher on quality attributes than are moderately priced institutions. Further, discounts are found to have little effect on the attendance decision. Implications of these results relative to the pricing strategies used by institutions of higher education are discussed.

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